The Future of Australian Grocery

PLAY Online Grocery FutureThe arrival of Amazon is threatening to disrupt the Australian grocery market. Is it time for retailers to develop their online offering to better serve today’s shoppers?

Online grocery shopping is booming around the world, and has the potential to revolutionise the way Australian shoppers fill their kitchens, but what does it have to offer them?

Convenience

Many Australians are feeling time poor. According to a survey run by the Organisation for Economic Co-operation and Development, 45% of women and 36% of men ‘always’ or ‘often’ feel rushed or pressed for time.

This would imply a natural progression towards convenience shopping. Opening hours simply do not exist for online stores. This has created a new level of flexibility for those shopping around a demanding occupation or family circumstance.

Range

Shelf space in bricks and mortar stores is extremely limited and comes at a premium in key metro locations, limiting consumers’ access to a variety of goods. Typically, a bricks and mortar superstore will carry anything from 20,000 to 30,000 products and there are only 1,000 to 5,000 products in the average convenience store.

Contrastingly, upon the launch of Amazon Fresh in London, the business promised UK  consumers over 120,000 products, cleverly blending many of the existing products to generate the appealing marketing tagline. If an online retailer can offer a consumer just one product they love and cannot find elsewhere, it might be enough to keep them buying the other 1,000 top sellers every single week.

Anonymity

Sometimes it’s not about how much you can buy, but what you buy and who’s watching. When consumers fear judgement, online purchasing provides the extra benefit of anonymity whilst browsing and buying.

Cost and budget control

Shopping online is often cheaper. Without the operational costs associated with bricks and mortar, online grocers have the cash to cut prices. According to Profitero, bestselling private-label products on Amazon Fresh are at least 14% cheaper than in UK supermarkets. A virtual basket also offers the shopper better control of their budget. At the checkout of an online store, it takes only the click of a button to return goods to shelf.

Personalisation

The amount of information that can be stored about an individual, and utilised to generate additional value to the consumer, makes the virtual shopping trip experience more relevant than the relatively prehistoric navigation of aisles. Brands like Amazon are incredibly focused on treating each customer like an individual, especially in terms of their capacity to cross-sell products.

Online merchandising

Online merchandising works harder and is more responsive to how the consumer wishes to shop. For example, with Australia’s recent consumer focus on health star ratings, customers of an online grocer could simply filter categories by stars rather than turning over every potential purchase in a physical store.

So, what have the best-in- class online grocers offered the world?

Convenience in terms of shopping when, where and how consumers want, as well as an enormous number of products for every niche desire, a private browsing experience when it’s needed, cheaper than high street prices, more control over budget during a shop, and a personalised experience … all from the comfort of their couch.

Chris Thomas is the Managing Director at Sydney-based creative market research agency, PLAY MR – the FMCG specialists.

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